Today’s post is contributed by Amy Nickson, a passionate writer on finance. Amy is a professional blogger who has started her own blog. She often writes about debt and today is no different. Please share your opinions by commenting below. We have no financial relationship.
The month, April is known as Financial Literacy Month in our country. And, this month can be the perfect time for parents to inject good money habits in their children. Because the best teaching starts with home so parents should teach their kids about financial insights at their tender age. Remember, lack of financial knowledge can make a person overwhelm while dealing with money. They won’t be able to get out of financial problems in life.
Teach them the fine line between need and want
Parents should take the initiative to teach their children about the differences between need and want. Usually, young people get enticed to everything. They have the habit to think that they will purchase everything. If they spend excessive money apart from their capacity, they will fall into a money problem. Thus, as a parent, you should help them understand what comes under need and want category. Thus, they can easily maintain a balance between their needs and wants while they will deal with their hard-earned money in the future. It will help
Let your children believed that saving is fun
Saving money is the key to have a peaceful financial life. Thus, every child should learn how to set aside money at their tender age. But, the money-saving subject should be exciting and fulfilled. Children should never feel that saving money is a sort of compulsion for them. Otherwise, a little kid will not be interested in learning how to save money.
Since children have an immature brain so it is important to make them feel that saving money is just like any game that they love to play for fun. If they take saving as a sort of fun, then they will learn how to save money after mitigating all the essential expenses.
To teach your kids good money habits, you need to set good examples. How?
Children usually copy their parents. And, you can take advantage of this habit. You can serve as the ideal person for good money habits to your kids. To do so, you may have to change some money habits of yours that are not perfect. But, to teach good money habits to your kids, you should do it.
Make the money topic more interesting
Kids usually get bored if you talk to them extensively about money. So, it is better for you to teach your kids about money management through some interesting examples. This can prove to be great fun for them.
Give your child a piggy bank
Give your kid a piggy bank with compartments for different issues of life.
For example expenditure, savings, and for donation. This will help your kid to learn how much they should spend on each compartment.
This will also help them to become kind as they will learn giving is an essential part of life.
Teach your kids about the importance of hard work
You should teach your kids about the importance of earning money. Teach them how can you earn money by assigning them small homework. Let them do some daily chores on their own. In return, give them a small remuneration. Tell them to use their earned money for their own purpose for example- buying back-to-school stuff. Also, ask them to save leftover money in the piggy bank. By injecting this habit, you can make your child a financially responsible hard working person.
Show your child how money fulfills their basic needs
It is important to teach your kids the value of money. A smart way to define the monetary value to your kids is to give them the idea that without money you can’t even have the basic needs of your life. You can use everyday items to make your kid understand that you need money to get those items too.
Allow your kids to buy their own things
Try to allow your kids to buy their own things. You can accompany your kids while doing this task. This will help them understand the difference in prices between different items. They can also be able to make a judgment over things. It will help to build a choice making personality in them.
Tell them to avoid debt
You should make your child aware of the danger of accumulating debt. Because debt can damage their financial health. So, before taking out any loan, they should assess their financial ability. Because taking out a loan is not enough, they should repay the debt within the stipulated time. Otherwise, they will fall into debt. And, then they have to consider debt advice to get out of the situation.
Allow them to do a part-time job
If your kids want to do a part-time job to fund their higher studies, don’t stop. You should encourage them to manage a side hustle to earn money. This will help them to become independent in life. It will also help them to an avid student loan to fund higher studies.
Teach them how to do a budget easily
Budgeting is no longer a daunting task in this digital era. Teach them how they can easily follow a budget with the help of budgeting software. You can also show them how a budget spreadsheet works. Let them choose one budgeting method that they like most.
Teach your children about credit cards
Most young adults use their credit card randomly. But they don’t know that they should pay the bills in full and within time. Otherwise, they will fall in credit card debt cycle. They know that credit cards are free money that they can use to get everything they want. This habit becomes a curse for them as they deal with credit card debts through their career and fail to build saving for their financial future.
Thus, every parent should teach their children about credit cards and how to use credit cards properly.
You should also let them know the importance of credit score. It will help them to deal with their credit cards responsibly. Thus, they can easily avoid credit card debt.
Lastly, learning financial knowledge is important. Parents should inject the financial lesson to their kids. Because their kids will leave home and face the world all alone. Thus, parents should prepare their child with all necessary financial knowledge to help them to survive in this world. Basic education in finance should be one of the things that you train your child to help him/her to succeed in life. If your teen learns to manage their own money, then they can have a high standard of living. They will not have to depend on you for their expenses and will also be able to choose their own paths without worrying about financial issues.
I am Eiman Jahangir and I am a dad, husband, and cardiologist. I grew up in the South, trained in the Northeast, moved out West, and now am happily back home in the South. My wife and I have seen our fair share of ups and downs, from the pain of dealing with infertility and losing everything in a matter of hours in the Tubb’s Wildfire, to the joys of having our son and finally finding a medical practice that is right for me. It hasn’t always been easy, but I am grateful and continue to move forward in positive steps.
I write to help people looking to improve their lives. I have written my thoughts and experiences on a wide arrange of topics from parenting to finances to mindfulness. While some of my posts are more useful for doctors and other high earners, most are for everyone.